CRECER 2016 – Nassim Taleb On Fragility

0:15and as usual before we start out like to do a little test I was in moscow giving
0:25a workshop and the most translated as it is now and I was making cracking jokes
0:36and I noticed that people were serious child arrives at Rice leader did not
0:45translate my jokes I hope it’s not the same here as a translator
1:03we don’t have a clock so in the time so the next hour I’m gonna talk about
1:18anti-social and from there are about entrepreneurship how it connects but
1:29first let me explain how I got the idea of speciality I was an awesome trailer
1:38for a long time
1:39121 years as you can see I lost all my hair worried then after 21 years of
1:47trading I decided to have a life so I surround what do you do you know when
1:54you stop trading and unfortunately I’m not good at Tennessee chess board had
2:00bridge mad at you no stranger to you in the day so I ended up doing mathematics
2:06second career doing that trying to magnetize when I worked on before and my
2:12idea was to master thousand ocean of fragility based on an insight I had when
2:18I was an option trader which is that this is fragile
2:26why I wanted to answer that question
2:31I detected from my experience as an option cleaner that it was trying to
2:38show is because it had some kind of allergic reaction to volatility that was
2:44that was my speculation and wanted to check the southwest and once you man put
2:49his fragile than you can match the opposite of what life’s volatility while
2:55likes the Sun Cluster things and from there you can generalize the things and
2:59shine so but first let me tell you the other two people not the option traders
3:06when asked people what is the opposite of French and described fragile this
3:13breakable doesn’t want to be shaken it has a sign and you sending a package
3:20from western Mongolia to get the message that it should not be mishandled wanna
3:30ask people the opposite as they never tell me you know the right thing
3:36a specifically people give me that its robust the robustness not the opposite
3:43of fragile the robust you know doesn’t care is like people in New York
3:49Brookland they don’t care
3:51proves it on the great shots so then it hit me that we often traders had the
3:57name for things like volatility as opposite doesn’t like volatility and
4:03that back as I’m sending to Mongolia ok if it had the opposite opposite
4:10properties too fragile it would not be this it would be pleased mishandle on it
4:17you see please
4:20you know brutalized me as a package up to a point so came up with that idea now
4:26I was one or two years into my post rating life I’m slow so I started seeing
4:35hey you know perhaps I can such analyzing and it took me seven or eight
4:39years to finish the idea completely I’m slow actually I get there that there was
4:48an attribute to sayings that like disorders that like things and certain
4:53way and that one was very similar to packages we often traders had that like
5:01volatility so but when I go back to history I realize that the Greeks to
5:10effectively they may not have had the words
5:24as I said like you
5:26but it’s mostly known as represented by what means you shoot it comes back the
5:39way it was before
5:40not better not worse and of course a certain category we just discussed now
5:48when you look at financial packages they have the shape you make it make you make
5:56your make you make and then once in awhile he knows everything
6:01the picture is not your money so you just say hey you know it’s a mistake I
6:09want repeated but you keep your bonus or someone else’s money I repeated this is
6:13a fragile package sorry I’m not seeing anything here and someone who’s this I
6:18lost my sight so this is the fragile
6:25no upside or downside the second line an asshole not fragile this is in time
6:34series space and the third one is the answer is fragile as you can see small
6:42downside than upside the robust no big upside and downside of course the
6:51fragile small gains or no gain and big downside like the coffee cup not look at
7:00this you know I didn’t hear if there’s a
7:05quake doesn’t have an upside know so does like anything doesn’t like mistakes
7:11if I make a mistake handling it will break so from this we can generalize and
7:17look at a partnership thanks google translate another skilled
7:25helped a little bit but France so I call them the disorder others saw his shifty
7:32doom 3 I’d like to if you like one you like them all
7:36not widely adopted into effect in comp Plato conocimiento
7:44oportunidad house is the sort of the in like in Tokyo in camp or law this one as
7:56it does on impact or if you like one you like them all and you have to a point
8:05that you hate want to hit the mall and your fragile one
8:11incidentally is that why is it that when you don’t like this order is so then you
8:20don’t like time this time to explore this orders
8:26that’s it for example was time more things can happen so this coffee cup
8:32will not survive five thousand years from now
8:35probably will not be found but a stone outside
8:39will be there the way way is to now so now something that’s the property of
8:46everything organic the central idea in my book is that complex system and
8:56organic systems they love they love disorder why did you like the sort of
9:03remember you like stressors they communicate with their environment yes
9:08stressors so we have two paradigms the cat and washing machine and the central
9:17chapter is closed on the main difference between the cat and Washington people
9:25ask me why then I had this obscure titles to confuse journalists because
9:31you know I’m like Donald Trump you know I’d like to consider analysts so the
9:39year and also because of his to begin every the book just read the table of
9:43content and environment so I had that piece but there’s a central idea now
9:51what does that mean difference between a cat and washing machine that everything
9:55organic degrades
9:58under no flash please you see I’m fragile to flash flash flash so the
10:06concentration + attitude here you know so everything organic benefit from some
10:16kind of stressor whereas the washing machine if you go meet with a hammer on
10:23a washing machine will it improve know if you bank with your head on a washing
10:29machine will it improve know you handled improve the washing machine will not
10:35include and it’s a washing machine
10:40alone with a degraded not really ok maybe a little bit of oiling of the
10:49machinery so what happens with everything
10:52constructed top-down doesn’t like volatility everything made bottom-up
10:58loves disorder volatility stressors communications environments
11:03stressors so he saw the big mistake people make is to think of the economy
11:14as more like the washing machine then it is like a cat and the difference between
11:23the two is considering let me explain when you have if the economy constantly
11:34at the same level without any stressor without any problem with that any
11:38recession what happens haha what happens
11:45one analogy is considered a forest if you distinguish every single fire in a
11:53forest prevent the foursome having any fire zero tolerance for fires what
12:00happens in the forest flammable material will accumulate so and what will happen
12:11to the forest two-thirds of when the big one happens when it takes place same
12:17thing with the economy if you leave the economy alone it will have its own you
12:24know
12:24cleaning up if you maintain a constant temperature so to speak a lot of week
12:32friends will accumulate risks will accumulate and then of course 2008 will
12:37happen and we’ll still there
12:39change that’s the problem is taking the cat for a washing machine everything
12:45organic each variations dressers chaos chaos not too much a little bit to keep
12:52going so now the big mistake it’s the same that lowering risk and an economy
13:01is done by luring variability in fact lowering risk is done by increasing
13:08variability and increasing small wrists willing that entrepreneurial risk
13:16because they’re small risks smoked outside became a small risks but
13:23decreased the largest and that’s how we talk about it when arriving over those
13:30ratings of the Black Swan Cygnus I ask people
13:36compared to countries 140 governments some disorder other 11 government of the
13:48same period I should go to classes classes two countries one has the same
13:54family the other one had the same government and ask political scientist
14:002006 which countries more stable the one was forty government or the other one
14:04was the answer the one was one government over four years which one do
14:14you think of the country was one government area of the country the other
14:22one to saudi arabia gives you an idea the next pictures of Saudi Arabia was a
14:27country was 40 governments Italy last time I checked we still good still
14:37working much better looking than this so you realize that stressors are good for
14:43countries are good for a single life because of overcompensation like
14:49volatile so like if you wanna stay in good health
14:55this is a common structure you need bone in your bones want stress actually going
15:01to if you ever have the idea of going in space shuttle space missions spent six
15:07months
15:09your boss will come back to rate it now one problem that stock on society how
15:18our society understands risks everybody
15:24talks about post-traumatic disorder like there was war people have trauma they
15:30need treatment how frequent visits opposite posttraumatic growth 1211 1212
15:52experienced
15:54someone just proved it the oldest living person today is a harsh word survivor
16:00doesn’t mean we should check people to trauma that completely cocoon and it’s
16:10the same thing with the economy same thing was regular life because it looks
16:15like rose comes from over compensation I go to the gym I list the hundreds of
16:20pounds my money prepares to list
16:23$150 over compensation and actually I spoke quietly because you were both
16:38accomplished in increased concentration that anyone of you realize that the
16:42mccarthy attend to south side mount if you have trouble with a mathematics
16:47problem good to see you concentrate better because from over compensation so
16:54now let’s talk about the economic growth the idea is looking seriously that
17:01resources are good right
17:04have been devised something called the Dutch
17:07disease not a good idea to have resources
17:11step further by showing you that effectively if you want to have a
17:18prosperous nation countries city that’s what you need to have no resources the
17:27situations has 0 resources they went to place the head cover Cyprus mail us a
17:39cover the broadcasters to Cyprus from Cypress Hill chips to go dead copper so
17:49we have the ship’s less right to use them to sell the supreme or something
17:54and he got into commerce and effectively in no time they were in southern Spain
17:59just having trading volatile trading posts all around the western
18:05Mediterranean simply because it started off with no resources same thing with
18:11Singapore probably the most prosperous nation today is Singapore no resources
18:17there even have water for compensation
18:22Amsterdam and you can even compare the place and most pleasant place in the
18:28Persian Gulf oil to buy to compensate between the service economy and use you
18:37know the wealth of others so basically
18:41me if you deprive someone of resources like Venice they learn to turn water
18:46into gold should give someone gold that was you know what happened to Spain to
18:54give him gold in Spain right you give them water he had vanished so if you had
19:00to choose between Golden water water right so now sometimes you realize as I
19:08said
19:09benefits from the states now while the idea has to be something not
19:19particularly brilliant on my part because Netflix I don’t know if you know
19:24that’s lisa is here but Netflix has a chaos monkey which hats are all system
19:32continuously this aroma that tries to destroy their own system they said you
19:39know a lot of people who saw us the best thing is to try to destroy ourselves ok
19:45so figure out how to improve their system from continuous attacks by their
19:52own chaos monkey they understood and utility now let’s talk about technology
20:01we’re gonna get the technology option health even here is a good glimpse
20:04concerning the closing the so what we have here is before and after the
20:13dot-com crisis translated to Spanish but looks like the best thing that happened
20:19and software and hardware sectors in america was the year 2000 destroyed and
20:30rebuilt with a vengeance here now let’s talk about options
20:41little ones look at the shape of an option to buy it you pay $5 $1 whether
20:50you pay for it that’s all you can lose and how all the upside to a lot more
20:54upside than downside but the graphic showing you that lose a small and makes
20:58big consign small investment
21:03any point in time you have very little at risk and it can keep doing it the
21:08opposite of that is a fragile Anderson property of option is that you always
21:16make more when you’re right then you lose when you’re wrong now conversely
21:22the first 10 percent say you make a million the market goes your way
21:28second 20% you make twenty million see you have an accelerated profits while
21:34the fragile everything fragile has to have the opposite attributes let’s look
21:39at the stock price through the storm I’m not threatening please don’t call the
21:44police but the first released on anyone’s head there with her now if I
21:51broke up the stone has faith in pebbles are still hurt no not that much so
21:58basically you are fragile heart more than twice as much by a stone of five
22:05kilos then you are my stones to an ASCII
22:10acceleration and that’s a shame of acceleration yeah we have an
22:17acceleration
22:20anything that is fragile is disproportionately harm by large
22:25advanced more than small events and everything and the opposite properties
22:32she that acceleration exactly like an option if the if you are short
22:38volatility and the market went down 9 percent say you lost a million 20% you
22:48lose twenty million
22:49acceleration so you’ve harmed a lot more by large events than you do I love a
22:54smaller that’s that’s the property of everything fragile mystic mystery used
23:00to prove it was drinking a lot of costly colombian girl she has a right
23:05drink a lot of coffee try to prove it then end up leaving now based on that
23:11that the larger you are the more fragile you are or the Harmer the larger the
23:17harem the more you gonna be hard you can see it then objects around you seems
23:25don’t scale linearly because they get more fragile human doesn’t look like a
23:30small baby at large baby and baby does look like a small human
23:35why is it so because as you get bigger to get bigger you can become more
23:43fragile and figured out the Bible the big powers vastly more fragile than its
23:54equivalent and small houses
23:58likewise an Ellison
24:01vastly more fragile than amounts of fun elephant cells from here is gone that
24:09breaks relaying a mouse will always recover so now let me explain why
24:17because as I said 20 intensity twenties more harmful than twice the intensity of
24:241000 so fragile that run on the intrinsic properties of 25 July few
24:31minutes but this is a rule this is the last technical drafts arrests is going
24:36to be anecdotes any point in time you lose more than you gain since the
24:42market’s up 1% to make a dollar a month is down 1% you lose the less than $1 say
24:50we have a curve
24:52know it’s like an option and you are and official conversely the second 10% make
25:01you more than 10% of acceleration up to a point if on the other hand you have
25:06opposite
25:08negative sign in front of it your fragile so this is everything fragile
25:12everything and fragile so in other words I’m not going to give you a mathematical
25:17class was conduct ok for a very simple reason this number this ok accelerated
25:27benefits accelerated harm she and this explains why when an animal becomes
25:35bigger as more fragile
25:39why we have many more mice in New York City then we have had elephants in
25:43history politics and usually the memory stick and why is very large friends that
25:50do not survive but it depends what I mean large depends on a function is a
25:55large restaurant is a hundred tables
25:58large for car manufacturers as large as much larger so depends on the industry
26:06on the function banks need to be launched right restaurants cannot be
26:11large or larger than you need to be at risk because mistakes cost a lot more
26:17disproportionately fragile because of that structure cost a lot more now this
26:23comes from whatever rule these children well so now we’re getting into
26:29enterpreneurship and discovery you recognize asylum
26:37before this is commonly known as the wheel
26:45how long ago was a discovered six thousand years ago in West out turkey
26:55the loans and commercialization headed by the thousand years for this
27:04application from from this to this took six thousand years and no I was a
27:14student
27:15and therefore I don’t have a lot of money in the seventies had to carry my
27:19luggage travel like this because you don’t want to pay for what it is that
27:26ollie
27:27why did it take so long for someone to figure it out because discovery can be
27:32staring at you intellectually were not capable of imagining delete the pic you
27:37have to discovered by tinkering the optionality as let’s talk after now let
27:45me show something even more convincing this your closets not far from here this
27:55is in Mexico the premise that the mexicans built this is not have a wheel
28:02supposedly as a true that they did not have the wheel
28:11didn’t realize that you could use you can you can use this to building permits
28:20did not make the leap just like we looked at the wheel or six thousand
28:24years not realizing the luggage and attractively Steve Jobs did not advance
28:34that visual thing we just saw the application and let’s talk about the
28:39industrial revolution they said well they invented the steam engine is a true
28:43team Asian was invented hero of Alexandria had the exact there just to
28:52see the application say so let’s talk about the nation looks like we’ve had
29:03succession history come from businesses that loss mistakes benefit from their
29:13own estates you for the Pharma pharmaceutical ok it’s not going very
29:20well as an industry as well as an in the thirties will have absolutely no clue
29:26about why is it so because you look at the record bar mom and realize that they
29:35did very well because of long optionality on their mistakes
29:38someone makes a mistake it so happened that that mistake make some more money
29:44then then didn’t make a mistake
29:50example I’m sure
29:52you have heard three fatally about something called viagra viagra came from
29:59the committee said Donna said ok we have lot of middle aged a lot of older men in
30:06Florida and there’s a huge market for this know what was her side effects of
30:17hypertension medicine and the nurses on the eighth floor started calling it’s
30:25not exactly the stories actually just as funny but I don’t have time for a long
30:30story but something it now if you look at pharmaceuticals what we have
30:38thousands worldwide
30:48of these very few are you saw what they’re made for a very few and the ECG
30:58drugs even when they discover something for cancer that shrinks the blood supply
31:01to work for cancer or marginally but which perfectly for macular degeneration
31:07decidedly and of course a prime example is aspirin aspirin today is used as a
31:16blood thinner but initially it was designed as a fever reducer had malaria
31:24within a few minutes later and they noticed that as a side effect it was a
31:30pain killer Joe is used as a painkiller now it’s a blood thinner and that has
31:35forced another application I don’t know what this is
31:39businesses that love her mistakes
31:42and and and and basically our discoveries and farm all have decreased
31:50now that people stop tinkering and they started using an actual load and let me
31:56talk about the Philosopher’s Stone there’s two ways to approach a problem
32:01that’s it I want to make the perfect perfect perfect perfect I’m lebanese so
32:08let me pick homes ok perfect almost so there you go to Boston go to MIT and
32:17higher all the chemists taken on a driver and take her on her honor retreat
32:25and make him right now he questioned for the British Thomas and then some factory
32:34will implemented this one technique top down the other one is bottom-up cheap
32:42you go into your kitchen you take an existing homes recipe and you having
32:49regions and you start adding randomly and you taste if you like it
32:56it improves your home so all you need to know if you have to have the
33:02intelligence of realizing is that what you got this slightly better than what
33:06you had before and
33:10you don’t have anything to lose because if you were sent the homeless what do
33:14you do with it
33:15mother-in-law right so viciously northern side right direction upload
33:21outside so these are the two opposing matter what is top-down intellectual the
33:27others you look at the history of science and technology you take
33:34Wikipedia people define technology as an application of science to practical
33:39matters it’s the exact opposite science technology and say everything comes from
33:50tinkering actually and then distinct low backers so the Philosopher’s Stone
33:55that’s what I call the problem of lecturing birds how to fly
33:59also known as The Associated Harvard problem
34:06ok where you have a bunch of people lecturing birds how to fly and they have
34:11the illusion that burns listening to harvard professors learn how to fly
34:16under flying because they know you know they know the biology and now they say
34:21no that’s not what happens so basically that phenomenon lot of the technologies
34:26were discovered by the equivalent of today’s computer hackers bottom-up
34:31people think they can small raced down side as you saw your mother-in-law very
34:38small outside no big investment discovering something i’m looking up and
34:43seeing an application to the house so I did something here what kind of IQ
34:50because i dont have liked you but I think too much
34:55someone who’s tinkering look at this how much like optionality all you need to
35:03know is what it called ratchet up no like you to know what you discover that
35:07home which is better than the other
35:09incidentally this is how much other nations receipts other nations doesn’t
35:17have any claim
35:18making the British maybe it makes a lot of you know and the benefit from
35:23randomness of the environment so that things improve on their own one
35:27generation as time and even Mother Nature tales about 50% of the time so
35:35tinkering to approach a problem and its active sexually bias only an option to
35:42understand what you mean
35:44and all the options traders pulled me much rather be stupid and long options
35:50than smart and sort options and effectively I transformed into whether
35:57the anti-fascist then smart thinker tinker tinker tinker right so instead of
36:02on MIT just want you so you need a thousand IQ points to marcia thinker
36:09some may have now principal aprovechar la verdad como nope I hope my accent
36:19doesn’t turn you off so let’s look at history of companies in america
36:25origin they’re making rubber goods they just sort of senility someone they were
36:34not in prison isn’t going to see in a business plan to switch just what was
36:38whatever it was the math
36:40interestingly they believe their stories after after that I wasn’t feelin and
36:47everybody’s been morning what happened to Nokia was because you only had one of
36:52those ok we get them down but anyway a big success story as someone dominating
36:59cell phone markets in Europe completely murdered by Apple and and by by the
37:04koreans but time to start the records of another one reaching on their making
37:11refrigerators and they said they saw an opportunity if they’re selling books I
37:21think the shop sells more than books I know from personal use but was around
37:29department they’re making explosives but I guess that you know that
37:44you’re making explosives I don’t know if you realize that it’s not a huge market
37:47to sell two days this week and of course of chemicals to city that’s the best
37:55opportunity grabber they were making stationary as someone shows up
37:59pay you know I want legislation before the wedding engagement when they reach
38:04and from there on and wet weather boots must register with us and then he came
38:16to office now they sell the expensive stuff out the paper they saw proctor and
38:22Gamble course and boy can someone point they don’t say it you know they don’t
38:30say it they say they indirectly the family within the lumber business and
38:35one of them like airplanes and at a time ever in seattle is a capital for you
38:40know one of the family members got into airplanes for the senate ok you know
38:46what the middle left lumber and and and they started setting out plans so what’s
38:54your plan business plan not so you should not you should design your
39:02business plan for it not to be a prison
39:06those stick you can say I make hypertension drugs I’m not gonna do the
39:10viagra 2010 obscene vulgar armenians
39:17do no such onus on your family in other words an option for two years is not as
39:25valuable as two options of one year
39:30keep these options in your own business plan structure in other words make plans
39:35but have the option of exiting from and as short term as you can free up
39:45depends much more the value of an option on the structure that you have then on
39:52the business and let me give an example I’m sure by now you might have noticed
39:56you’ve heard of person double gold oil change dropped it is well know
40:02definitely well maybe not as wealthy as he thinks he is very rich how did he get
40:08rich is gonna come back to this let me ask you a question what’s the business
40:16at Los the most money for banks and United States real estate what’s a
40:23business that created the most Welsh for individuals in the United States real
40:28estate why the different financial contracts one had the upsides the other
40:34has announced I so have you heard of manufacturers hanover about chemical
40:40bank ok so manufacturers hanover went bust because they took the risk of the
40:47ultram 400 basis points
40:50donald Trump went bust they lost ever seen and one donald Trump which makes
40:57everything and minor solid basis points
41:00chemical bank bought manufacturers hanover and went down so they were
41:05astray by of course now they bartered JPMorgan Chase alright save my chase by
41:12Jim Russo chemical-chase
41:14same mistake so you realize it’s not so much the business they give you the
41:20opportunity but your contracts as well what kind of deal do you have up sidle
41:25up Chanel Dior know an option
41:28benefits from uncertainty the opposite a fragile so many interesting things about
41:37these individuals
41:39midline of money in real estate because the banks not knowing / Fannie Mae went
41:44bust they lost six hundred million much billion dollars as a lot of money even a
41:50lot of money giving homeowners fee options to be fine ass when interest
41:58rates are low they refinance when interest rates are high I’m a stuck with
42:03it so this option is OK or statements do not relate to the licentious on why like
42:15Microsoft Google Apple benefits from financing but should impose financial
42:22let’s take two steps here the first one to remember my paradigm wanna make the
42:29perfect hope that someone giving me a lot of money instead of thinking what I
42:34would’ve hired all these chemists and don’t know where but because I had no
42:39money I think learn more
42:41the slum the second lesson you learned from here is that Microsoft Google and
42:47Apple and Facebook as well as the others but what do Google Apple and Facebook
42:54haven’t commented Mike
42:58sorry Microsoft Apple and Facebook have in common is that the entrepreneurs are
43:07closed off house why
43:11well one lesson we can learn from this is that education is very good but it’s
43:18not as we said knowledge nicknamed the know how and when you increase if you
43:24force someone to finish his diploma he has more to lose and they don’t engaged
43:29into entrepreneurship so we are educated people at the high school level given
43:36technical skills even the world bank realize that think about microsoft said
43:44Bill Gates was a dropout so was varied and Apple of course tee shot drop off
43:54from school had they stayed at school together diploma maybe they would be an
44:04MBA working for morgan-stanley I’m certain he’ll gays would be a corporate
44:12attorney boring boring boring corporate attorney and we’ve had no computer
44:17revolution and St jobs because they have more to lose money have a big diploma
44:23and when you’re young
44:25the reason is to actively enterpreneurship works best when you’re
44:28young not because people are younger smaller but because they got less to
44:33lose so more option Lt because if you don’t have a degree you have less to
44:38lose money have an MBA from Harvard now you don’t go to work for McKinsey
44:43make half a million dollars $1,000,000 so what why bother was was always a risk
44:49I’m working 80 hours a week so that’s the first thing I noticed that the World
44:56Bank realized that figured out one thing and actually a guy who discovered the
45:01fifteen years ago but a dick 64 the World Bank I am slow they are very slow
45:0715 years turned to make it into the policy every country today that is rich
45:14has high degree of college education college I mean universi so people are
45:22prompted to think that university education causes when she checked
45:30opposite countries like Korea got rich first indications follows if you do the
45:39other way as they try to these chips people stop doing that two productions
45:43to stop tinkering and in fact the best investment is not in universities but an
45:49apprenticeship or people have so in the knowledge society isn’t so much the
45:54germans realize that everything is apprenticeship its nicknames and doing
45:59things not been thinking about the classroom
46:02my technique of homos rather than the technique of hiring MIT professors say
46:07so there is a balance between the two of course but typically countries that have
46:14had a lot of success and science are countries that got rich
46:20and even the size was developed outside universities tuk tuk got rich was
46:28thinkers aggressors adventurers who rediscovered scientific scenes and
46:36hobbyists the hobby scientists and then auctioning cameras start thinking
46:42credits like strangers have to fly so you have to be careful at the level of
46:48society the best investment you can make is high school and money in India so
46:53convinced of this point he said I’d rather have a thousand high schools and
46:57not one university I want to increase and he wants to teach people technical
47:02skills so they can tinker more and increase a model of apprenticeship that
47:07really killed all of Western Europe they respect knowledge because you know the
47:14light gurus but in fact that’s not really how they got there and then of
47:19course the success of Spanish but I put down don’t obscure onus
47:27obscenities right so the success option option option everything else should be
47:34there to favorites and work around it now
47:38ok I am totally confused with this technology is fragile have no idea how
47:42long he’s speaking because of not working fine but I assume from my washed
47:49out maybe five day notice ok so we can continue now with what I call the
47:54intelligence of time because I will link it to an idea of the commotion about
48:01technology and interesting properties technology you remember when I showed
48:06you the slide the puck the disorder druthers I told you what likes
48:11volatility like style what doesn’t like all tools she doesn’t like time for the
48:20fourth time is the best
48:21just have something works so let’s play the stock experiments that will help us
48:31understand how everything that is fragile
48:36ok will will will will not survive high hand and take it one step further this
48:43more interesting this your grandmother knows a lot more interesting when I see
48:47an old man with his grandson and assuming I would for insurance company
48:55had no idea is unconditional about these people whose lives the other the child
49:03or the grandfather who has a longer life expectancy to go
49:11child ok actually it’s not exactly today’s society yes and other societies
49:16not quite because I was shuttled mortality but the song now every day
49:23that the person you like to see decreases by a lesson today so if I live
49:3110 years from now because she was decreased by about nine years
49:35ok so here’s something to bring you live on less you have to live thats applies
49:44to everything that’s fragile because we humans are fragile but now let’s talk
49:50about technologies I have a young technology and an old technology which
49:56one do you think is likely to last longer
49:59the young or the old technology uses Yahoo
50:05ok I will discuss technology I’m live in these 3,200 years silent how all this
50:22technology
50:27Egypt it was so is this period is OK and then you can keep going this is a new
50:35technology without it assuming it’s the thing about technology that young
50:41technologies are very vulnerable because they get displaced by other technologies
50:48so let’s take the computer people tell me well our universe as computers
50:52computers talk to me a little bit used to have computers there are completely
51:00displaced by what Miami computers and then later on by you know and the subtle
51:05revolution California by the home computer remember the stop
51:12about 20 some years ago the desktop ran a role how many of you still use the
51:19stop the only reason to have a desktop as you want to store store employee just
51:24add the best it was replaced by a lot but the laptop and from what I can see
51:31in her room here looks like the desktop has been displaced by why you’ve been
51:36using take my picture the tablet
51:40no question how old is a tablet as a technology 5,000 years old they drive on
51:50it and then erased ok let me come back and explain my idea every year that it
51:58technology supplies provided still helping extend its life expectancy by
52:05two years this is strange that this is why because time was unable to destroy
52:13evidence that’s a speciality argument so if you gotta go into something find a
52:19variation technology you can produce a little better cheaper like the Chinese
52:24is probably what they do is pass and moved from southern lebanon to China
52:31make it cheaper and probably better technology you say is your technology so
52:38what happened this technology is that the
52:46the converging today to see we have had a will there’s a car
52:54depending how you define it calls my
52:59this is called The Linde effect from a restaurant called Lindy
53:03in the territory where people figure out the life expectancy of a theater
53:07increased every day every day that has survived
53:12show of the Broadway show as life expectancy increased so the linda’s
53:21factory calls and very high technology so if you define the car as we drive our
53:29ads with an engine so honest but some years old last month but if you find
53:35that are as a blue convertible 40 white mini convertible it’s just okay so if
53:43you define now the car as a box on wheels four thousand years old Texas so
53:52this
53:54very robust sorry this law then the effect is very robust no matter how you
53:59define technology and looks like with conversion think we’ve always had that
54:03the only when people tell me look the car is displacing the bicycles
54:07essentially the numbers the only country in which the selling more cars and
54:13bicycles China has two years ago now slowdown bicycle today is based on the
54:19car we have more bicycles in most countries than cars go to New York City
54:26how they’ve hit by something this cyclist not a car not a tax increase in
54:34taxi driver so this is how old you think a suspicion it’s not an Italian
54:44restaurant in bogota you know opened in 1964 people who came directly from
54:50Naples know this is a Roman Empire papi
54:57say we just do the same thing was probably the front material or better
55:04technology that’s it so this is the hindi aside from that notion of
55:10fragility is whatever is not fragile will be revealed by time and time only
55:17so looks like by now I can stop us summarize some rather than we stopped
55:24them we have many thanks for inviting me and I wanted to talk about optionality
55:30the ideas as an option trader you discover things started doing the world
55:38a certain way and I spent my time doing isn’t really creating ideas just putting
55:43together a coherent structure ideas that would observe a lot of people a lot of
55:49people say medicine improved by lockheed it’s not luck this convection it’s a
55:56personality because luck can be good or bad but when you hit by bad luck and
56:01have a shot now to you last left off you don’t care
56:05positive emotionality so this is not a complicated idea of some traders usually
56:11have night cubans barely room temperature they drink a lot of the rain
56:18by the time the 40 but they’re still just an option to get rich and was
56:24absent later then they start going into any business contracts longer satisfy
56:32short up now and unfortunately people who are dedicated they don’t understand
56:37shelton actual
56:40their group from MIT those wanna make the perfect almost writing the equations
56:44rather than thinkers who do things because they have low risk high reward
56:49so thank you for listening to me I’m honored to be here